Solar Stocks Report Begins Jan. 9

My last post contends that solar stocks in America are becoming mainstream on all of the major indexes. I've noticed over the past two weeks just how closely ten top, publicly-held solar companies, listed in the previous post, have paralleled the DJIA and NASDAQ nearly point-for-point.

While I'm obviously an advocate for solar power worldwide, I only have a general knowledge of the machinations of the stocks and bonds world. Still, investors and non-investors look to the major stocks indexes to gauge growth of any industry and particular stocks within that industry. For that reason, a new feature, tentatively called "Key 20 Solar Stocks This Week" will begin posting Friday, January 9, 2009.

Why Follow Solar Stocks?

First off, we can assume the Obama Administration will be more proactive in the realm of renewable energy. Indeed, solar and wind power could be the Magic Bullets for the new administration in that they can: (1) provide good jobs that cannot be exported: (2) reduce carbon emissions by burning less coal and natural gas for power thereby (3) mitigate the effects of global warming. The extension of the federal solar tax credit to 2016 can be a boon for solar in all 50 states. (BTW, I sold a solar kit to a man in Alaska four years ago which he installed on his summertime fishing lodge on the Kenai Peninsula. It would have cost him $20,000 to bring utility power in which he would use just four months a year. Long summer days gives him plenty of power exactly when he needs it. My overall point is that solar makes sense nationwide.)

Hedging like a college football coach, I cannot confirm nor will I deny that solar stocks could be the ones to buy in the near future. More states are instituting their own rebates and/or tax credits. Here in San Diego, Mayor Jerry Sanders announced this month that the city will begin a solar loan program in March that allows citizens to purchase PV systems at a low, fixed interest rate paid over twenty years with state property taxes. All of these incentives stimulate growth of the solar industry even during these difficult times because the future cost of electricity is, at best, any one's guess.

Selecting the Key 20 Stocks

If somewhat subjective, choosing the key solar stocks will be an informed selection on my part. The best I can say is they will be panel or inverter manufacturers; cover crystalline and thin-film technologies; and will be comprised of major stocks worldwide with the preponderance being American companies. Any stock that is delisted by the NYSE or NASDAQ obviously will be dropped from the list and replaced.

My Ulterior Motive

The posts in this blog covering the price of panels and solar stocks generated the most hits, by far. I will not be forsaking the educational angle of this blog but generating hits is important to any blogger. For those who are passionate about what they write, like I am, will know online traffic is the name of the game. It's about spreading the word.

Commentary: Solar Stocks Going Mainstream

About a week ago I installed the free MarketBrowser program (www.marketbrowser.com) that will track up to twelve major stock indexes and specific stocks of choice. Stock prices are updated every 20 minutes and can be viewed by list or graphically by charts. I remember in the late 70s early 80s delayed stock quotes in your desktop made a company called Quotron a lot of money. Today, with Internet access this service is free.

I selected the Dow Jones Industrial Average and the NASDAQ exchange as my overall stock barometers. Then I chose ten of the most prominent solar stocks to follow. These are Canadian Solar, Energy Conversion Devices (UniSolar), First Solar, SolarFun, Suntech, LDK Solar, JA Solar, SunPower, Renesola and Evergreen Solar. This international mix of companies are among the major players with the stay power to get them through the recession.


Just glancing over all 12 year-at-a-glance charts one can easily notice that nine of the ten solar stocks closely paralleled the DJIA and NASDAQ indexes (ECD-UniSolar the exception). Most started considerably higher in January; dipped in the spring; surged a little in the summer; and began the taper down with the banking failures starting in September. Just like DJIA and NASDAQ. Granted, solar stocks can be volatile but that's not unusual for companies in an emerging industry. If anything, solar stocks are looking more mainstream than ever before.

Solar stocks have taken a beating this year but then what stocks (beside defense or oil stocks-- one protecting the other), haven't had a bad year? Still, solar has shown a 25-40% annual growth rate since 1996 and even if there is a lull because of the credit crisis, the demand for solar power should not wane.

As I explained in my Nov. 26 post, there are many reasons the solar industry could be bullish for the economy. The Wall Street bailout included the solar investment tax credit extension through 2016. Residential solar buyers beginning Jan. 1 can claim a full 30% income tax credit on the price of a home installation, a credit that's been capped at $2000. Investor-owned utilities, formerly exempted from the tax credit, can claim it, too, beginning next year. This is particularly key for California utilities that are mandated to have 20% of there energy production from renewable sources by 2010, 30% by 2020.

The growth of solar companies will also be an answer to the dearth of jobs nationwide while it helps cut carbon emissions. If the Obama Administration institutes a formal carbon cap-and-trade program, it will be a boon to solar--and wind, geothermal--as well.

The day will come when solar units--whether for power or hot water or both--will be as ubiquitous on houses and buildings as computers are inside them. Mark my words.

Care & Handling of the Solar Tax Credit

By now most know the Emergency Economic Stabilization Act of 2008 extended the solar investment tax credit (ITC) through 2016 and the $2000 cap for residential solar installations has been dropped allowing for the full 30% credit businesses get. The extension, as it turns out, might be the only good thing for Main Street in a major chunk of legislation aimed at fixing Wall Street. It's a very good thing, to be sure, but let's review the details.




The Database of State Incentives for Renewables & Efficiency (DSIRE, see Related Links) summarized the solar electric ITC extension in October thus:

"A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the U.S. used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is on a new home, the 'placed in service' date is the date of occupancy by the homeowner. Expenditures include labor costs for onsite preparation, assembly, or original system installation and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year... Consumers who receive other incentives are advised to consult with a tax professional regarding how to calculate this federal tax credit."

DSRIRE went on to say that in case of joint occupancy, the maximum qualifying amount allowed is $6,667 per occupant. Lifewise, the credit may be claimed proportionally by how much each individual paid. Finally, the law states the PV installation must be used as a residence but does not have to be the principal residence to qualify. Any unused tax credit from the first tax year may be carried over to the next tax year.

It is particularly important to consult a CPA or tax attorney if your state offers a solar rebate which is taken with the federal tax credit. Normally, the tax credit is taken on the balance after the rebate is deducted from the total installation cost. If however, one takes the tax credit against the whole installation cost along with the rebate, the rebate could be taxed as income. At present, the issue is better determined by a professional who also considers the solar customer's tax situation.

A four-page set of frequently asked questions about the solar tax credit was produced by the Solar Energy Industries Association, the national trade organization for the solar industry. It is available at: http://seia.org/galleries/pdf/ITC_Frequently_Asked_Questions_10_9_08.pdf

'09 Panel Prices Could Remain Flat

Part 2 of a two-part projection

Yesterday's post gave projections of two solar stock analysts on PV panel pricing in 2009. Their reasoning included the most common market drivers of oversupply of polysilicon, oil below $60 a barrel and the credit crunch. This blogger contends many other factors could very possibly keep panel pricing flat next year. Confused? Then, let's lay it out.

1) Polysilicon glut: Granted, there are many more players making silicon wafers than just three years ago but oversupply could be short lived next year. When the federal solar investment tax credit was extended in the Wall Street bailout, it also dropped the $2000 cap on the residential tax credit allowing a full 30% credit (like commercial projects) of a PV system's installed price. A 5kW residential system at around $37,000 will fetch an $11,100 credit instead of a measly $2000 before.

Furthermore, private (taxable) utilities are no longer exempted from the tax credit. Utility-scale PV installations by nature can be huge. The very smallest are one megawatt (MW) and as large as 40MW (and getting bigger). Using an average 200-watt panel on a 1MW project is 5000 panels. Power utilities (as opposed to water utilities) are being pushed by state mandates to use more renewable sources. If utilities line up--and there appears to be a lot of action in the Southwest--panels could be eaten up like corn at a turkey farm.

2) Oil is rarely used as an energy source for producing electricity but it's the primary source of energy for transportation. Coal, natural gas and nuclear power are the primary energy sources for electricity production. Just because we pay about half as much for a tankful of gas now than we paid in June doesn't mean our electricity bills are going down, either. They're not. In fact, there have been three rate hikes alone since spring with San Diego Gas & Electric. So it doesn't follow that falling gas prices will lessen the demand for solar power.

3) Credit squeeze. This doesn't apply very much to large commercial solar projects as most of them are financed through power purchase agreements (PPAs). This is the financial instrument that got WalMart and Safeway stores on the solar bandwagon. A PPA firm is composed of private investors with the need to mitigate their tax burdens. PPA investors actually assume ownership of large, multi-million dollar PV projects to take advantage of the 30% federal tax credit along with any state or local incentive. The host customer (like Walmart) agrees to pay the PPA firm say 15 cents per kilowatt-hour for the 15, 20 or 25 year life of the PPA agreement. Thus no up-front cash by the end-user is required; the system is owned and maintained by the PPA group; and the customer gets the benefit of lowering its carbon footprint and lots of good PR.

4) A blowback in wind. Wind is a clean, renewable source of energy but windfarms are usually a long way from the urban areas that need their power. In Texas, transmission lines are already maxed out and upgrading to a larger infrastructure will cost billions. (Maybe that's a reason T. Boone Pickens curtailed his "Plan" for the time being.) Another issue with wind is that it produces power best when the power is less needed, in spring and fall, not during the dog days of summer. Finally, wind turbines--though they're getting better all the time--are mechanical and require shutdown for maintenance. Solar panels crank from June through September when air conditioning loads are highest.

5) Greenhouse Gases and Jobs. In the widely viewed "60 Minutes" interview of Barack Obama on Nov. 16, the president-elect appears locked into promoting clean energy technologies.

Interviewer Steve Kroft asked whether cutting oil imports was less important now that the price of oil has plummeted from $147 a barrel earlier this year to under $60.

Obama: It's more important. It may be a little harder politically, but it's more important.

Kroft: Why?

Obama: Well, because this has been our pattern. We go from shock to trance. You know, oil prices go up, gas prices at the pump go up, everybody goes into a flurry of activity. And then the prices go back down and suddenly we act like it's not important, and we start, you know filling up our SUVs again.

And, as a consequence, we never make any progress. It's part of the addiction, all right. That has to be broken. Now is the time to break it.

As already mentioned, oil is most important for transportation and less for electricity production but the point is still clear. Solar (and wind):

--reduces dependence of fossil fuels thus
--cuts greenhouse gas emissions that
--mitigates global warming while it
--creates thousands of non-exportable jobs by
--establishes a long-term solar power infrastructure

Some administrations have relied on wartime economies, tax cuts or unusually low home loan rates to stimulate money flow. All of these, to one or another extent, have been utilized during the past eight years while a free-wheeling financial sector was left to "self regulate." Solar power could be the Magic Bullet of the next administration in that it could turn the economy around while achieving so many ancillary benefits. (And conservatives won't attack it as a give-away.) Like the space program during the 60s, the commitment to clean, renewable energy will take a strong political will. Even more so, it will take moral and ethical will.

--

The analysts covered in yesterday's blog overlooked my five counterpoints and maybe that's because this blogger is closer to the industry. So, will solar panel prices drop in 2009? Maybe, but not by much.

Analysts See '09 Panel Prices Dropping

Part 1 of a two-part projection

There has been a lot reported about solar panel pricing for 2009. Some analysts see panels dropping others, like me, see them holding. Very few see panels rising in cost but that cannot be discounted either. Let's review.

The Information Network market research firm contends solar will continue to grow about 40% and key growth drivers such as the price of oil, polysilicon shortage and government subsidies will have a lesser effect on panel pricing (Michael McManus, Digitimes 11/19/08). Considering solar still cannot compete with conventional energy sources, an oversupply of panels can be seen short-term.

"The Information Network noted that utilization rates at solar plants are only 56% and its analysis of 103 solar manufacturers showed that panel production capacity in 2009 will be 15GW whereas only 8.3GW will be sold."

After next year, says the Network report, players in the solar market will still face varying market dynamics even as the solar industry grows. (Editor: Really? Isn't change the only constant in life?)

"High oil prices have been driving demand for solar panels but with oil prices dropping to $60 a barrel, there will be a lot less interest in alternative energy. While this may be a short-sighted view by companies, the economic realities of the global economy--highlighted by the credit crunch--mean that even those companies that want to build solar plants may have difficulty finding funding."

The Information Network report said the past shortage of polysilicon for standard panels led to a surge in thin-film panel demand. However, a counter-surge in polysilicon plants has increased production and likely will reduce demand for amorphous silicon thin-film PV with efficiencies below 8%. This will impact equipment companies like Applied Materials and Oerlikon.

The Wall Street Journal's Market Watch reported that polysilicon pricing is not only "pressured by a coming supply glut" but that the current credit crisis will drive down demand for solar panels, the biggest users of silicon ("Polysilicon prices fall to earth", Laura Mandaro, Nov. 22, 2008)

Global warming concerns and high energy costs charged up the demand for solar panels in the recent past, the article said. Stocks of solar panel makers and silicon suppliers sold off sharply recently on concerns the credit crunch is causing solar power projects to be postponed if not actually shelved. In fact, Suntech, China's premier panel maker, slashed its fourth-quarter revenue forecast. In the process, panel pricing could continue to fall.

Some 60 new companies have joined the polysilicon market during the past two years; 90% of prior manufacturing had been handled by just seven suppliers, the Market Watch article reported. Global supply of polysilicon will double in 2009, likely outpacing demand growth of 34%.

This blogger contends other factors--not considered by these analysts--could hold panel pricing flat during the new year. Part 2 will explain.

Free Greenhouse Gas Calculator, Webinar

President-Elect Barack Obama said he pledged to begin "a new chapter in America's leadership on climate change." He was speaking in a prepared video Nov. 18 at the Global Climate Summit in Los Angeles.

Obama reaffirmed a campaign commitment he made to reduce greenhouse gas emissions (GHG) 80% by 2050 with a national cap and trade initiative. This program would run concurrently with his pledged $15 billion annual investment "to catalyze private sector efforts to build a clean energy future."

So, it looks like our country will finally get serious about CO2 emissions but we can do more than just hope we're not too late.

Sun Microsystems offers a free GHG calculator

Sun Microsystems just launched OpenEco.org, an online community assisting organizations calculate, compare and reduce GHG emission. The only cost is in sharing date, transparently or anonymously, with other participants.

Sun contends GHG analysis is increasingly done with home-grown or proprietary tools that can may require major internal resources or pricey consultants. Using the new site, Sun hopes to see carbon accounting data--which usually remains private information--will be shared using the site's GHG tools. The program lets organization benchmark against each other; set reduction goals and share best practices to meet them. Already Ceres and Natural Logic are participating.

"Working together drives progress faster than working alone," said Dave Douglas, Vice President of Eco Responsibility at Sun Microsystems. "Sun was built on the philosophy of openness and building communities to solve problems, which we're now applying to the environment. When we share, sustainable business can be more attainable - and prosperous - for everyone."

A video demo of OpenEco V. 2 is at:
http://www.environmentalleader.com/
2008/11/16/openecoorg-20-launched-by-sun/

Free Webinar on GHGs Dec. 9

How do you manage GHG emissions in a complex regulatory environment? If you want to feel more confident in the data you are collecting--reporting GHG emissions to shareholders, regulators and other external organizations, here's a free web seminar called "GHG Data Confidence: How Do You Stack Up."

This December 9 seminar will cover:

 GHG and Sustainability market trends
 How and why companies are managing GHG today
 Plans for managing GHG in the next few years
 What you need to get started on your GHG program
 How to simplify GHG reporting complexity

Hurry, registration is limited: http://www.enviance.com/registration/landing4.aspx

Lower-Priced Silicon Cutting Panel Costs

Finally, something new in crystal silicon technology. Well, it's not actually new so much as it was passed over for purer silicon chips. Now upgraded metallurgical grade (UMG) silicon is one answer to lowering panel costs possibly stealing some fire from various thin-film products.

Blue Square Energy of North East, Maryland announced Nov. 5 that it has produced a 14.6% efficient solar cell with its patent-pending Bright Point technology. It's one of the highest efficiency UMG cells in the world and verified by the National Renewable Energy Laboratory (NREL).

"What we've been able to accomplish is a major milestone towards achieving our goal of creating low-cost solar energy for homes and businesses," said Joseph Babin, CEO of BSE. "This proves that inexpensive silicon typically considered unsuited for the solar industry can be utilized to create solar energy that is price accessible for most Americans. Solar modules made with our Bright Point technology will soon be the best choice for those who care about our environment and their wallets -- and want to save both."

Most UMG silicon is slightly less in purity than the 99.9999+% seen in high-grade silicon panels today. UMG silicon contains either boron, phosphorus or iron reducing purity to 99.7% to 98%. This slight difference means significantly reduced cost for silicon panels because lower-grade silica becomes acceptable and less cost is incurred refining it. High-grade silicon runs about $200 per kilogram; UMG silicon can range between $20-$50.

Other developer/manufacturers of UMG panels are Q-Cells AG (Germany), LDK Solar (producing UMG silicon for Q-Cells in China), Hemlock Semiconductor Corporation (Michigan), REC Solar (California) and Evergreen Solar (Massachusetts).

(Special thanks to John Perlin for his input on this article.)

Perlin: 'Clean Coal is like Perfumed Garbage'

An Exclusive Interview

John Perlin, noteworthy author of From Space to Earth: The Story of Solar Electricity, was in San Diego last week for a meeting commemorating the fiftieth anniversary of the first practical use of photovoltaics by Bell Laboratories (see "Two Must-Have Solar Books" posted Sept. 20). This blogger was able to interview him over dinner on Thursday.

Asked about the upcoming Obama Administration in relation to renewable energy Perlin had this to say:

"Obama stressed renewable energy over 'drill, baby, drill.' The fact that he so craftily used the Internet to win the election shows he embraces new technology. McCain evidently doesn't even use a computer."

Perlin , who resides in Santa Barbara, is wary however of Obama's interest in "clean coal" and nuclear power expressed during the campaign.

"Clean coal is like perfumed garbage," he said. "There has not been any sizable sequestration of CO2 from coal-burning power plants." Besides, he says, CO2 leakage is likely from natural venting of the Earth's crust as with volcanoes or tectonic plate shifts. Then there is nuclear power.

"I see three problems with nuclear power. First, we haven't learned from our experiences with accidents; the Chernobyl and Three Mile Island incidents were strong warnings. Secondly, the very presence of nuclear plants gives terrorists the nuclear threat (if they forcibly take one over) without even having to invest in it. And finally, nuclear waste--and there's a lot of it--can be used to make dirty bombs by either terrorist cells or rogue governments.

"Furthermore, nuclear power requires copious amounts of water for making steam and for cooling spent rods. Solar power uses no water and this is important as the world's supply of fresh water sources is drying up," explained Perlin.

He sees two types of solar power: smart and stupid.

Smart solar he sees as incorporating energy efficiency in all new architecture, including passive and active solar methods.

"Housing placement should be planned so it can act as both a solar collector and deflector," Perlin continues. This is done with proper window placement with low-E panes; sufficient eaves and other shading on the south and west sides; and light-colored roofs for less heat retention, among other low-tech options like improved insulation.

"Stupid solar is not planning for it in the architecture and then adding a PV system to a bad design, sort of as an afterthought," Perlin concluded. He thinks feed-in tariffs for solar power would accelerate growth of the industry in the U.S. as it has already in Europe and that many of the existing rules of solar installations are too strict, bordering on obstructive.

Let the Sunshine In!

When sitting down to write this post that old classic Aquarius, performed so well by the Fifth Dimension, just popped into mind. I kept hearing the ending chorus, "Let the sunshine... Let the sunshine in..."

Change in America is in full swing. The very image of Barack Obama, soon to be our political leader and commander-in-chief, is Bigtime Change in itself. It's change that's rejuvenating our politics; regenerating our culture; and restoring our good reputation abroad. Call me corny but I never left my idealism at college 36 years ago. I also served an Army hitch, so I've earned the right to be a little out there. Is this the real dawning of the Age of Aquarius?

Harmony and understanding
Sympathy and trust abounding
No more falsehoods or derisions
Golden living dreams of visions
Mystic crystal revelation
And the mind's true liberation
Aquarius!
Aquarius!

Yes, this change also will be good for solar power and all other truly renewable sources of energy. We still need to impress on President Obama that there really isn't such a thing as clean coal. Those words will always be mutually exclusive. Nuclear power needs to be fazed out, too, and our dependence on natural gas for producing electricity needs to be shown the door by 2050, if not sooner. Speaking historically, we have more knowledge and experience in clean energy solutions than we had in 1961 when we challenged ourselves to land on the moon. We did that in just eight years.

Props 7 & 10 Go Down

California voters were surprisingly discerning on Tuesday about the two big energy related propositions on the state ballot. Proposition 7, a so-called renewable energy generation initiative, blew a lot of smoke but CA voters saw threw it (see Commentary below). The measure was roundly defeated statewide by 64.9% to 35.1% of those voting. Similarly, Proposition 10, the alternative fuel vehicles and renewable energy initiative that T. Boone Pickens was behind, was defeated by nearly 20 points, 59.8% to 40.2%.

These two defeats come as a result of two factors. Californians remember being figuratively raped by outside power sharks during the energy crisis of 2000-2001. Poorly written state deregulation coupled with greedy players --Enron, Duke Energy, El Paso Corporation, Reliant Energy and Sempra Energy (parent of SDG&E)--made ratepayers like wolves being shot from airplanes. This writer sold several PV systems solely on the "backlash" effect of this travesty.

The other reason is that Californians have been at this renewable energy thing for awhile. CA residents and businesses enjoyed both a solar/wind rebate program and a state income tax credit for solar installations from 1998-2005. Although the state tax credit ended, the federal solar tax credit came into effect in January 2007 when the new California Solar Initiative (the "other" CSI) was also instituted. Whether with active participation or by osmosis, citizens in the Golden State can tell the difference between a fair, deliberate approach to energy problems and some private entities' blatant grab for cash at the public's expense.

California: NO on Props 7 & 10

Lessons for Other States

When Hiram Johnson, progressive governor of California from 1911-1917, added the state initiative (plus the referendum and recall) to allow for more "direct democracy", I wonder if he ever thought it would provide an avenue for rich out-of-staters to cash in on the Golden State. Propositions 7 and 10, if passed next Tuesday, could richly swell the coffers of an Arizona and a Texas billionaire. Furthermore, I wonder if he and his contemporaries could foresee California's collective influence on other states.

Proposition 7, the Solar and Clean Energy Act, is described in the CA 2008 Official Voter Information Guide and is supposedly intended to reduce use of coal, nuclear power and offshore drilling by increasing installations of solar and wind power.

However, Prop 7 favors large, utility-scale installations of 30MW or more. Today, 60% of all solar contracts are for smaller PV systems. This could force small renewable energy companies (dealer-installers) out of the California market, reducing competition and jobs. (This can already be seen on large projects where only SunPower, SPG Solar and Sun Edison corner the market.) There is no wording in Prop 7 to limit increases in electricity bills and it allows power providers to always charge 10% above market price for power, stifling competition for more renewable energy. Basically, Prop 7 would make the state more dependent on electricity from Arizona--power produced from coal and nuclear plants. Both state Democratic and Republican parties are against Prop 7 as are the CA League of Conservation Voters, CA Taxpayers Assn, even the state's investor-owned utilities, SCE, PG&E and SDG&E.

Proposition 10, the Alternative Fuel and Renewable Energy Act, is what might be called Prop Pickens. That's because Texas billionaire T. Boone Pickens shelled out $3 million to get this initiative on the ballot. Prop 10 would take some $10 billion CA taxpayer dollars to subsidize large vehicles and trucks to run on natural gas, much of which is sold by, of course, Mr. Pickens. Despite claims to the contrary, the initiative is craftily written to exclude hybrids, plug-in hybrids, electric cars and true alternative fuels like vegetable oil and hydrogen.

Granted, natural gas burns cleaner than gasoline or diesel but it still is a fossil fuel that emits CO2 at combustion. Calling natural gas an alternative fuel is somewhat deceptive when the goal is to eliminate greenhouse gas emissions. All in all, Prop 10 asks $9.8 billion from CA taxpayers: $5 billion in a 30-year bond from state's General Fund to which must added $4.8 billion in interest. This, from a state currently enduring an $8 billion budget shortfall.

Widespread Ramifications

More and more states are adopting clean energy portfolios that mandate less coal- (and nuclear) produced power for more natural-gas produced power. With more utilities switching to natural gas AND an increased demand from the transportation sector, the cost for this resource could become staggering and soon. Higher electricity bills and pricier natural-gas tankfulls are sure to follow.

As the energy paradigm shifts, we must constantly be vigilant of which "green" initiatives support the common good: The green that means clean, renewable energy for everyone or the green that lines the pockets of the supremely wealthy few.

Commentary: Power by the People for the People

Anyone reading this blog is very likely a proponent of solar power. For any sceptics who might happen by, you are certainly welcome. Either way, as a solar professional I have found there are good and not-so-good ways to stimulate solar growth in the United States and worldwide. This election year is proving my point.

Energy has never been more important to developed countries and the very rapidly developing countries of the Far East. Conventional sources of energy production--coal, natural gas, oil, nuclear--are being consumed at alarming rates. These sources get costlier as they get harder to find and mine. They're hard on the environment from which they're extracted; they pollute air and water; and they are downright dangerous to use. They are also controlled by huge conglomerates and utilities that produce and set pricing pretty much as they please.

Solar and wind power offer a rare opportunity for all of us. These truly renewable power sources can help us rearrange the typical utility-ratepayer relationship. Producing power with solar panels on the roof or adjacent lot or parking structure directly gives "power to the people." When connected to the power grid, net metering makes the utility more of a facilitator than a power provider. This sort of opportunity on a mega-scale is rare in history.


So, when voting on issues involving solar or wind power, be wary of who is behind such issues. Oil and natural gas companies and for-profit utilities are getting involved in renewable energy production either for sheer profit motives or government mandates. Overall, this isn't actually bad because it means less fossil and nuclear resources will be consumed. On the surface, the Pickens Plan (wind power) is the perfect example of this (see "Pickens: J.R. Ewing with a Twist?" Sept. 16 posting). But it also means bigtime petroleum billionaires and farflung, impersonal corporations keep control of energy, its distribution and its pricing. Furthermore, while we might assume energy from the sun and wind are cheaper to produce over the longrun, we CANNOT assume these power providers will pass along the savings.

By making direct investments in solar and wind, we are producing reliable power by ourselves for ourselves. We must all try to keep it that way.

AZ Solar Contractor Sizes Up SD Conference

Mark Holohan, president of Code Electric in Phoenix, Arizona, said last week's Solar Power International 2008 conference in San Diego showed the incredible globalization of solar power.

"European [solar] companies are expanding to America and there's an increasing supply coming from the Far East," said Holohan, whose company is a leading installer in Arizona. He said the state of the global economy and Europe's reduced feed-in tariffs will slow solar's growth from the recent 40% but he still projects worldwide growth at 30%. The recent extension of the solar investment tax credit in the U.S. will have a lot to do with it.

"Also, the tax law has changed to include [for profit] utilities so solar could see a sizable increase from power producers, as well," said Holohan. He sees significant growth for the Arizona solar market spurred by last May's decision by the state Corporation Commission (which regulates Arizona's public utilities) to support more renewable energy funding.

Holohan noticed a marked increase in thin-film products, especially in amorphous silicon. Holohan was this writer's mentor when he ran UniSolar's residential sales program in San Diego beginning in 2002. (UniSolar is still the country's largest manufacturer of flexible amorphous silicon PV.) After successfully administering the project for two years, he was promoted by UniSolar to commercial sales director for Southern California. Among other installations, he sold the 1MW PV laminate installation at the General Motors western supply depot in Rancho Cucamonga, California and a 700kW PVL system on the Long Beach Convention Center, site of Solar Power International 2007.

Holohan's offers advice to homeowners and businesses contemplating installing PV systems.

"Solar [as an investment] is still the right thing to do," he contends. "Incentives are dynamic so always take action to secure them for yourselves. It doesn't make sense to wait for a breakthrough because the incentives for solar are always more dynamic than the technology."

In the Phoenix area, Holohan can be contacted at markh@code-electric.com.

SD Solar Conference Draws a Record 22,500

Second in a two-part series

As invariably happens in San Diego when it hosts a world-class event, the weather was clear and warm for Solar Power International 2008 which ended yesterday. While the Stock Market had its second crazy week of mostly Dow Jones downers, the solar industry showed renewed vibrance as 22,500 visitors from over 70 countries attended the nation's premier solar conference, 10,000 more than last year's event in Long Beach.

Governor Arnold Schwarzenegger made an appearance despite the a deepening California budget shortfall and the nationwide financial malaise.

"Of course we are now facing tough economic times, but that's why we need to focus on solar and [the environment]," he said. "We should not listen to those who say [that] should take a back seat. That's just plain wrong."

Always looking for an excuse to come to San Diego, the governator continued.

"Let me tell you, in San Diego 80 percent of the people voted for me in the recall," Schwarzenegger said, referring to the election in 2003 in which Californians voted to recall his predecessor, Gray Davis, and to replace him with the actor. "The other 20 percent never forgave me for my movie, "Hercules in New York," which is completely understandable."

Sharp Solar announced offering a new thin-film panel beginning next August. Thin-film PV invariably is cheaper to produce than crystalline modules and less expensive on the market. However, the sales rep from Japan I spoke with said Sharp's thin-film entry will be priced about the same per watt as its popular average-grade (13.7%) silicon panel until volume production reaches its peak.

DH Solar of Prairie du Chien, Wisconsin, had an outside exhibit showing a 16-panel array on the company's Horizon-to-Horizon Sun Tracking System. It's the first sizable tracking device this reporter's seen that can be used at home or for small business with some extra space for the ground-mounted system. Advantages of tracking are as much as 40% higher output than fixed mount; the system need not go on a roof, maintaining architectural aesthetics; and the system can be placed to avoid any shading issues. For more information go to www.dhsolar.net.

Finally, of particular interest to me was what appeared to be an ultra-shiney sausage that was six feet long and seven inches in diameter. In fact it was a pure-silicon ingot or "boule" (see picture) that would be cut into ultra-thin wafers for use as photovoltaic cells or semiconductor chips for computers, watches or other electronics applications.

The normal process of "growing" a silicon ingot is interesting. A seed crystal on a rod is dipped into a crucible of molten silicon and spins it into a cylinder similar to spinning cotton candy around a paper cone. As the seed is extracted from the crucible the silicon solidifies and eventually a large, circular boule is produced. A semiconductor crystal boule is normally cut with a diamond saw into circular wafers (like cutting salami) and each wafer is polished for the fabrication of semiconductor devices or photovoltaic cells. Ingot production takes about 1.5 days and cutting/polishing the wafer chips takes eight days. Finding high-quality silica (sand) plus the long, somewhat complex process keeps crystal silicon panels costly which is why more thin-film combinations are being tested and marketed.

Solar Power International 2009 will be held at the San Jose Convention Center next October 19-22.

Solar Show Is Big, Energized; Trends Emerging

Part 1 of a two-part report

Solar Power International '08 in San Diego has been a good conference and exhibition so far, but aside from being noticeably larger than last year's show in Long Beach, most of the exhibition's content was existing or modified versions of existing technology. Still, there were some new things and I could see trends shifting.

The opening plenary sessions featured some heavyweights including Gen. Wesley Clark (ret.), Sen. Maria Cantwell (D-WA), Nasdaq OMX CEO Robert Greifeld, and of course, San Diego Mayor Jerry Sanders. Their comments likely can be found elsewhere on the Internet.

During the first day of exhibiting on Tuesday, interest seemed heightened by the extension of the federal solar investment tax credits included in the Emergency Economic Stabilization Act of 2008 which passed and signed into law Oct. 3. (See story below.)

There were a couple of innovative solar panel variations that caught my eye. A Japanese maker Kaneka showed a prototype of a hybrid panel using both amorphous silicon (a-Si) and crystal silicon solar cells. The idea is to reduce cost per watt, of course, but also kick up the efficiency over a straight a-Si panel. Although the company intends to market the hybrid panel next year, no spec sheets were available at this time. Lumeta Solar of Irvine, CA offers the PowerPly, a 4 x 8 foot 380W crystalline panel that adheres to virtually all flat roof types (commercial or industrial applications). By sticking to roofs it eliminates racking and roof penetrations while it reduces installation time as much as 50%. The PowerPly uses a transparent Teflon cover sheet instead of glass thus reducing weight, heat build-up, and chances of cracking. At only 1 cm thick, water ponding on a roof is minimized.

Coincidentally also from Irvine, is a product that has to go in the "Wow" category. It's the Fisker Karma hybrid sports car with an optional, full-length solar roof. The Karma will do 0-60 mph in 5.8 seconds but only has a 50-mile range per charge on lithium-ion batteries. To be offered fourth quarter next year, the Karma will be built in Finland and priced at $80,000. (Evidently, the car moves so quietly the company will be offering optional interior and exterior speakers with a menu of "car noises." I kid you not.) Although the Karma exhibit was small and cluttered, it was hard to miss.

As for trends, I noticed several more thin-film companies exhibiting beside the grandpa of thin-films, UniSolar. These included Opti-Solar, Applied Materials (selling turnkey thin-film fabrication units) and Ascent Solar. First Solar, Miasole and Nanosolar were absent for reasons of their own. Thin-film PV breakthroughs in various configurations are definitely reducing PV costs per watt; in some cases low enough to make the lower efficiencies--characteristic of thin-film PV--a non-issue.

Another trend is towards more concentrating solar variations but CPV is targeted for huge utility-grade projects.

Incentives, Oversupply Could Mean Great Solar Deals

Now that the federal solar investment tax credit has been extended (see Oct. 5 post below), it's time to size up what your state has in the way of incentive for photovoltaic (PV) systems. This information and more can be had at the Database of State Incentives for Renewables & Efficiency (DSIRE) compiled by North Carolina State's Solar Center. For further reference see Related Links at the beginning of this blog.

Besides the federal tax credit available in all 50 states and territories, eleven states provide incentives from both state and utility resources. These states are California, Florida, Indiana, Maryland, Massachusetts, Minnesota, Oregon, Pennsylvania, South Carolina, Wisconsin and Wyoming, plus the U.S. Virgin Islands. New Jersey had an attractive PV rebate program but ceased taking reservations in August. Details for each program are delineated at the DSIRE site. The remaining of states fall under three categories: state-only incentives; utility-only incentives; or neither incentive programs underway (the federal tax credit still applies.)

OK, but how would an average homeowner or business owner put this into perspective? For the sake of simplicity and the range of PV installation prices around the country, let's figure a price of $9 per AC watt installed. This includes all engineering and design, permitting, panels, inverter, racking, AC/DC disconnects (where required), and installation (labor). A typical family in California can use a 4kWAC system. At $9/watt the gross price (less sales tax, if not exempt in your state) is $36,000. The federal solar tax credit of 30% reduces the cost by $10,800 and an average rebate now is around $2.50/watt or $10,000. Net cost after incentives would be $15,280 or about 42% of the original cost. As a business investment, rebates are taxed as income by the IRS but not, to my knowledge, for individual homeowners. Also, in California a PV system is not added to your home's assessed value for property tax purposes. It is suggested to consult with an attorney or CPA about this issue if you're in another state.

PANEL PRICES COULD DROP

Last Monday Goldman Sachs downgraded the stock of both First Solar and SunPower, two of the nation's leading solar panel makers. The reasons Goldman Sachs gives are oversupply issues and a lack of European subsidies.

"The risk of oversupply in the solar market will soon become a reality as considerably less generous demand subsidies take hold just as a wave of supply and tight financing hit the market," said Goldman Sachs analyst Michael Molnar in a client note. "We believe that liberal subsidies of the past in markets like Germany and Spain are unlikely to be replicated in the future given fears of their ultimate cost in a bad world economy."

"We strongly believe that SunPower and First Solar are two of the best solar companies in the world and that both will be part of the growing solar industry for years to come," Molnar wrote. "However, in our view, even these companies will face headwinds in a market that is oversupplied with modules." (greenstocksgeneral.com, Oct. 7)

So this winter or spring could be an ideal time to go solar because panel pricing could be the best ever so far. But as a fellow solar associate of mine said today everything could be in good supply next year except money. Still he says, if you have it solar power is a great long-term place to put it.

Notorious Bill Extends Solar Tax Credit

Just when it looked like the sun would set on the federal solar investment tax credit, it will live on to see another day--make that eight more years. The tax credit for wind was extended a year.

The House of Representatives passed the Emergency Economic Stabilization Act of 2008, Friday, October 3, by a vote of 263 to 171. Less than two hours later, President George W. Bush signed it into law. The Senate had already passed it on Wednesday. Of course, the full intent of the legislation was welfare for Wall Street but banks will afford to make business loans to rev up American capitalism on Main Street. Extending the solar/wind tax credits also makes the bill more palatable.

"I am pleased that the bill includes an extension of tax cuts for clean renewable energy that will create and save half a million good-paying paying jobs in America immediately," said House Speaker Nancy Pelosi of California.

The one-year production tax credit extension also applies to other energy sources such as geothermal; closed-loop biomass; hydropower; landfill gas; and trash combustion facilities. It also creates a tax credit for a new energy production category - marine renewable - which is energy derived from waves, tides, and currents.

Furthermore, the measure boosts the tax credit limitation for fuel cells from $500 to $1,500 per half kilowatt of capacity.

Renewable energy purists must shudder at another part of the bill. It also provides tax credits for advanced coal electricity projects with highest priority given to projects with the greatest separation and sequestration percentage of total carbon dioxide emissions at a cost of $1.4 billion over 10 years. This writer believes the technology and time it takes to sequester CO2 at a coal-fired power plant would more efficiently be spent on truly renewable forms of energy generation, like solar, wind, geothermal, biomass conversion and marine methods. Like Halloween, Congress and the White House feel they must spread the goodies around.

"This bill is a major step in our long journey toward energy independence and ensures that solar energy will be a significant part of America's energy future," said Rhone Resch, president of the Solar Energy Industries Association, which lobbied long and hard for the tax credit extensions during the previous 18 months.

Resch said 60,000 Americans currently are employed by the solar energy industry.

"This long-term extension of the solar tax credits will create a domestic solar industry with hundreds of thousands of jobs while providing clean, affordable, carbon-free energy to millions of American families, businesses, and communities," said Resch.

The bill extends the solar investment tax credit for eight years the 30 percent tax credit for both residential and commercial solar installations. The $2,000 cap for residential solar electric installations is eliminated and so is the prohibition on utilities from benefiting from the credit. When the tax credits first were enacted by the Energy Policy Act of 2005, the solar industry experienced unprecedently growth. In fact, the amount of solar electric capacity installed in the United States during 2007 was double that installed in 2006.

"This bill puts the sun to work for every American," added Resch. "And by 2016, we expect solar energy to be the least expensive source of electricity for consumers."

Sunset for Solar Investment Tax Credit? An Update

The U.S. Senate has included the critical clean energy tax incentives--including an eight-year extension of the 30% investment tax credit and removal of the residential $2000 cap--in the bailout package. the Emergency Economic Stabilization Act of 2008. This would adds a significant job development enhancement to the package--according to a study by Navigant, roughly 1.2 million. Now the bailout would provide greenbacks for Wallstreet, but also green jobs for Mainstreet, where it's also critical. The bill will likely pass the Senate tonight, but prospects in the House are much more uncertain.

Since 2007 when the House majority re-instituted a pay-as-you-go or pay-go approach to expenditures and tax credits, Democrats targeted such credits for oil and gas be re-directed to solar and wind. The Senate and White House have balked for over a year on this version of HR 6049 (and various other bills intended to do the same).

The current extension attempt being included to the "Wall Street bailout" is still not fully funded in this new Senate version. This writer believes it should be passed anyway for the sake of keeping solar and wind vibrant, foster more jobs and continuing reduction of greenhouse gases in the process. Hopefully, as soon as next spring, the issue will be re-addressed by a more progressive House (and White House) that will more forthrightly reduce or eliminate oil and gas tax credits in favor of solar and wind tax incentives.

The Ever-Evasive Tax Credit Renewal

As most of you already know, the Senate passed House Bill 6049 as amended last Tuesday, Sept. 23 by a 93 to 2 vote with 5 abstentions. Today, the House passed its final version by a 226-166 but according to a story in the Tucson Citizen the "White House has (again) threatened to veto the House bill over its funding mechanism, and opponents have called the bill a dead end. Should President Bush veto the energy bill without a challenge by Congress, the credit will expire Dec. 31." If this happens, there might be a last gasp effort during a lame-duck session after the general elections. As the bill now stands, the tax credit for residential solar currently capped at $2000 will be a straight 30%, the same as commercial solar investments. If the bill either dies or is again vetoed by Bush, the tax credit ends December 31. More news, if any, will be reported here. For background on this issue read the Aug 27 post "Who Needs a Tax Credit?" in this blog.

Big Solar Event Next Month in San Diego

The Solar Power International Conference and Expo 2008 is just three weeks away. Billed as the largest solar event in the world, it will run October 13-16 at the San Diego Convention Center. Reported as a sell-out for conferences and daytime exposition, there will be a free public session on Wednesday evening, 6-9 pm, for adults only. This is a business-to-business type of event.

Two Solar Must-Have Books

Purchasing a solar power system for home or business is not an impulse buy. At least not yet, anyway. In fact, early adapters of relatively new technologies do a fair amount of their own due diligence before taking the Big Step.

There are two books I've read and refer to often. They keep me excited about the very wonder of photovoltaics and the boundless future of the industry.

The first is From Space to Earth: The Story of Solar Electricity by John Perlin (Harvard University Press, 2002). Since reading it in 2004, I've found Perlin to be perhaps the foremost PV maven of solar power. As the title would imply, it's a history of photovoltaics from Roman times to the near-latest in crystalline and thin-film technologies. (I say near-latest as PV and CPV--concentrating photovoltaics--have been improving, of course, since '04.) Well-written and understandable, From Space to Earth tells solar triumphs that have already solved energy problems in both the developed world and the Third World.

Perlin talks about how Australia was able to electrify the entire continent without miles of cable and towers but with microwave relay stations powered by solar. He explains how an ancient African tribe was always dependent on the women in a family to lug water daily from a river miles away just for cooking and washing. Today, underground aquifers have been tapped and water is pumped with solar power. Now there is not only enough water for daily living but enough to grow crops for the tribe and to take to market creating a micro-economy that had never existed. In both cases, solar power negates the need for expensive infrastructure to be built.

The other book I recommend is Exponential Solar--The Future of Solar Energy (IPESsol Inc., 2007). Written by engineer Dave Heidenreich and his staff at Innovative Power and Energy Storage Solutions in Ohio, the book parallels the computer's transformation of the world beginning in 1958 to with the potential for solar power in the next 50 years. The book's website, www.exponentialsolar.com, does the best job of capsulizing its content:

"Exponential Solar is a book that will awaken you to solar's incredible potential to solve our energy supply and global warming dilemmas. Without being scholarly or highly technical, it presents fascinating concepts gathered from a variety of energy disciplines that clearly show how solar could grow to become the world's dominant power source. It is written for non-technical readers who have an interest in renewable energy, but may doubt that solar could provide a practical solution to powering cars, homes, and businesses - for themselves or for the world. Exponential Solar provides an understandable and compelling vision."

Although both books can be purchased online, check with your local library or bookstore first.